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Criterion Software Ltd was created in 1993 to commercialise 3D graphics rendering technology. It was set up by David Lau-Kee and Adam Billyard within Canon's European Research Lab, before being spun out as a majority Canon-owned startup. Criterion Software was a technology company specialising in the development of the RenderWare family of middleware technology, including graphics, AI, audio and physics components. Originally Criterion Games was a division within Criterion Software, set up to develop games, using the Renderware engine, which would act as show cases as to what was possible with the platform. RenderWare is used in such games as Grand Theft Auto III, Grand Theft Auto: Vice City and Grand Theft Auto: San Andreas, which are developed by Rockstar Games, and the successful Burnout series, developed in-house by Criterion Games.

After the purchase, both Criterion and Electronic Arts declared that RenderWare would continue to be made available to third party customers. However, some clients decided it was too risky to rely on technology owned by a competitor. Electronic Arts has since withdrawn RenderWare from the commercial middleware market, although remnants are still used by internal developers.

In the summer of 2006, the company closed its Derby satellite office, making all of its programmers and support staff redundant. In early March 2007, Electronic Arts combined its Chertsey-based UK development studio and Criterion Games into a new building in central Guildford. Integration of the teams did not occur and the location housed two very separate development studios: Criterion Games and EA Bright Light before Bright Light was shut permanently in 2011. Despite being housed in the same building, Criterion Games still acts entirely independently from the rest of the Electronic Arts workforce located at Guildford.

On 28 April 2013, Alex Ward announced via Twitter that the studio is planning to steer away from its tradition in developing racing games and are instead focusing on other genres for future projects.[6] On 13 September 2013, Criterion elected to cut its staff numbers to 17 people total, as 80% (70 people) of the studio moved over to Ghost Games UK to work with Need for Speed games.[7][8]

On 3 January 2014, it was announced that co-founders Alex Ward and Fiona Sperry have left Criterion to found a new studio.[9]